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TMI BlogFinance Bill, 2016 - Changes in Customs and Central Excise law and rates of dutyX X X X Extracts X X X X X X X X Extracts X X X X ..... No. 33/2016-Customs (N.T.) 1st March, 2016 CENTRAL EXCISE Tariff No.5/2016-Central Excise to No.18/2016-Central Excise 1st March, 2016 Non-Tariff No. 5/2016-Central Excise (N.T.) to No. 21/2016-Central Excise (N.T.) 1st March, 2016 MISCELLANEOUS Clean Energy Cess No.1 and No. 2/2016-Clean Energy Cess 1st March, 2016 Infrastructure Cess No.1/2016-Infrastructure Cess 1st March, 2016 Unless otherwise stated, all changes in rates of duty take effect from the midnight of 29th February / 1st March, 2016. A declaration has been made under the Provisional Collection of Taxes Act, 1931 in respect of clauses 138 (i), 142 (i), 143 (i), 159, 231 and 232 of the Finance Bill, 2016 so that changes proposed therein take effect from the midnight of 29th February / 1s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d made up articles of textile is also being increased from 30% to 60% which shall apply to all goods mentioned in the notification No.20/2001-CentralExcise (N.T.) dated 30.04.2001 . It may be noted that the new levy is similar to the levy of mandatory excise duty of 10% on readymade garments and made up articles of textiles [goods falling under Chapters 61 , 62 and 63 (heading Nos. 63.01 to 63.08 )] when they bear or are sold under a brand name, which was introduced in the Budget 2011-12, except that: a. The present levy is an optional levy, that is domestic manufacturers will have the option to pay excise duty of 2% (without CENVAT credit) or 12.5% (with CENVAT credit)‟, b. The levy is restricted to such articles which have RSP of ₹ 1000 and above, and c. The tariff value is being revised from 30% of RSP to 60% of the RSP. 3.1.2 In this regard, I would like to reiterate the instructions issued vide Budget letter F.No.334/3/2011-TRU dated 28.02.2011, Instruction D.O. F.No.334/3/2011-TRU, dated 04.03.2011 and Instruction D.O. F.No. B-1/3/2011-TRU, dated 25.03.2011 . The said instructions shall apply mutatis mutandis to the new levy. Salient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be the tariff value of the goods. Explanation (C) to notification No.8/2003-C.E., dated 1st March, 2003 refers. (vii) The SSI exemption for the month of March, 2016 will be ₹ 12.5 lakh, subject to fulfilment of other conditions of the notification No.8/2003-C.E., dated 01.03.2003 . For this purpose, notification No.8/2003-C.E., dated 1st March, 2003 is being amended suitably. (viii) The eligibility for availing of the SSI exemption in 2015-16 for the month of March 2016 is that the value of clearances for home consumption from one or more manufacturer from one or more unit should not have exceeded ₹ 4 crore in the financial year 2014-15. The computation for this purpose shall be done in accordance with the provisions of Para 3A of notification No. 8/2003-C.E . For this purpose, a certificate from a Chartered Accountant based on the books of accounts for 2014-15 shall suffice. (ix) Excisable goods which were produced on or before 29.02.2016 but lying in stock as on 29.02.2016 shall attract excise duty upon clearance. Manufacturers shall keep a stock declaration of finished goods, goods-in-process and inputs as on 29.02.2016 in their records duly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r were less than ₹ 12 crore. In other words, jewellery manufacturer having aggregate value of clearances in a financial year exceeding ₹ 12 crore, will not be eligible for this threshold exemption in the subsequent financial year. Necessary amendments have been made in notification No.8/2003-Central Excise, dated 01.03.2003 in this regard. 3.2.2 The SSI exemption for the month of March, 2016 for jewellery manufacturers will be ₹ 50 lakh, subject to the condition that value of clearances for home consumption from one or more manufacturer from one or more factory or premises of production or manufacture during the financial year 2014-15 should not be more than ₹ 12 crore. Computation for this purpose shall be done in accordance with the provisions of Para 3A of notification No. 8/2003- CE. For this purpose, a certificate from a Chartered Accountant, based on the books of accounts for 2014-15, shall suffice. 3.2.3 Similarly, for determining the eligibility for availing of the SSI exemption from 2016-17 onwards, a certificate from a Chartered Accountant, based on the books of accounts for 2015-16, shall suffice. 3.2.4 Excisable goods which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n such cases, the principal manufacturer (and not job worker) will be required to get Central Excise registered, pay duty and follow other compliance requirements. This will ensure that small artisans/goldsmiths are not required to take any excise registration. viii. The levy is based on self-assessment and therefore, no physical visits shall be made to registered units in the normal course. 4. I would like to emphasise that the Board desires that all necessary steps shall be taken to enable the new taxpayers to comply with these new levies without any difficulty. The thrust of these new levies shall be voluntary compliance. Therefore, visits to such units should not be made in the normal course. These instructions may be disseminated to the field formations for strict compliance. 5. Difficulties faced, if any, in implementation of these new levies which are not covered by the instructions issued in this regard may be communicated to the Board without delay. 6. In order to achieve a sharper focus, I have alluded only to the key highlights of the budgetary changes in this communication. The details are contained in the Finance Bill and notifications which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Customs, dated 17th March, 2012 , as amended by notification No.12/2016-Customs, dated the 1st March, 2016 [New S.No.96A] refers. Chapter 23 to 24: No change Chapter 25: 1) Basic Customs duty on Silica Sand [2505 10 11, 2505 10 12 and 2505 10 19] is being reduced from 5% to 2.5%. Notification No.12/2012-Customs, dated 17th March, 2012 , as amended by notification No.12/2016-Customs, dated the 1st March, 2016 [New S.No.109A] refers. Chapter 26: 1) Export duty on Iron ore lumps (below 58% Fe content) [2601 11 21 and 2601 11 22] is being reduced from 30% to Nil and Iron ore fines (below 58% Fe content) [2601 11 41 and 2601 11 42] is being reduced from 10% to Nil. S.No.20A of notification No. 27/2011-Customs, dated 01.03.2011 as amended by notification No. 15/2016-Customs, dated 01.03.2016 refers. 2) Export duty on chromium ores and concentrates, all sorts [2610] is being reduced from 30% to Nil. Notification No. 27/2011-Customs, dated 01.03.2011 as amended by notification No. 15/2016-Customs, dated 01.03.2016 [new S. No.24BA refers] 3) Export duty on bauxite (natural), not calcined [2606 00 10] and bauxite (natural) calcined [2606 00 20] is bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pe Technology (BRIT) for manufacture of radio pharmaceuticals is being reduced from 7.5% to Nil. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No 12/2016-Customs, dated the 1st March, 2016 [New S.No. 163A] refers. Chapter 29: 1) Basic Customs duty on all acyclic hydrocarbons and all cyclic hydrocarbons falling under 2901 and 2902 [except para-xylene (2902 43 00) which attracts Nil BCD (S.No.174) and styrene (2902 50 00) which attracts 2% BCD (S.No.175)] is being rationalized at 2.5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2016-Customs, dated the 1st March, 2016 [S.No.172A] refers. Consequently, S.No.173 is being amended and S.Nos.173A, 173B, 173C, 173D, 173E and 176 are being omitted. 2) Special Additional Duty (SAD) on orthoxylene [2902 41 00] for use in manufacture of phthalic anhydride is being reduced from 4% to 2%, subject to actual user condition. Notification No.21/2012-Customs, dated 17th March, 2012 as amended by notification No.16/2016-Customs, dated the 1st March, 2016 [new S.Nos.45AA] refers. Chapter 30 to 38: No change Chapter 39: 1) Basic Customs duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 49: 1) Exemption from Basic Customs duty on plans, drawings and designs is being withdrawn. Such goods will now attract 10% BCD. S. No. 275 of notification No.12/2012-Customs, dated 17th March, 2012 is being omitted by notification No. 12/2016-Customs, dated the 1st March, 2016. Chapter 50, 52, 54, 55 or any other chapter: 1) Basic Customs Duty is being exempted on import of specified fabrics, of value equivalent to 1% of FOB value of exports in the preceding financial year, for manufacture of textile garments for exports, subject to the specified conditions. The entitlement for the month of March 2016 shall be one twelfth of one per cent. of the FOB value of exports in the financial year 2014-15. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2016-Customs, dated the 1st March, 2016 [new S.No.284A] refers. Chapter 51 and 53: No change Chapter 54 and 55: 1) Basic Customs Duty on specified fibres, filaments/yarns is being reduced from 5% to 2.5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2016-Customs, dated the 1st March, 2016 [new S.No. 290A] of refers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Taxes Act, 1931, these changes will come into force with immediate effect. 2) Basic Customs duty on other aluminium products [7608 and 7609 00 00] is being increased from 7.5% to 10%. S. No. 339 of notification No. 12/2012-Customs as omitted by notification No. 12/2016-Customs, dated 1st March, 2016 refers. Chapters 77 to 78: No change Chapter 79: 1) Basic Customs duty on zinc alloys [7901 20] is being increased from 5% to 7.5%. Clause 138 (i) of the Finance Bill 2016 refers. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, these changes will come into force with immediate effect. Chapter 80 to 83: No change. Chapter 84 and 85: 1) Tariff rate of BCD is being increased from 7.5% to 10% on 206 specified tariff lines falling in Chapters 84 and 85. Clause 138 (i) of the Finance Bill 2016 refers. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, these changes will come into force with immediate effect. The effective rates for 96 specified tariff lines will be 10%. 2) However, the effective rate for the remaining 110 tariff lines will continue to be 7.5%. S. No 422A to 422H of notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, subject to actual user condition. Notification No. 21/2012-Customs dated 17th March, 2012 as amended by notification No.16/2016- Customs dated 1st March, 2016[ new S.No. 85A] refers. 8) Basic Customs Duty and Special Additional Duty (SAD) are being exempted on machinery, electrical equipments, other instruments and their parts [except populated Printed Circuit Boards] falling under chapter 84, 85, 90 for fabrication of semiconductor wafer and Liquid Crystal Display (LCD), subject to actual user condition. Notification No. 12/2012-Customs dated 17th March, 2012 as amended by notification No.12/2016- Customs dated 1st March, 2016 [ new S.No. 372A] refers. Notification No. 21/2012-Customs dated 17th March, 2012 as amended by notification No. 16/2016- Customs dated 1st March, 2016 [new S.No. 82A] refers. 9) Basic Customs Duty and Special Additional Duty (SAD) are being exempted on machinery, electrical equipments, other instruments and their parts [except populated PCBs] falling under chapter 84, 85, 90 for assembly, testing, marking and packaging of semiconductor chips (ATMP), subject to actual user condition. Notification No. 12/2012-Customs dated 17th March, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. 21/2012-Customs . All these exemptions will be subject to actual user condition. Notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No. 12/2016-Customs; dated 1st March, 2016 [new S.Nos. 431E to 431K] refers. 14) Exemption from BCD under S. No. 372 of Notification No. 12/2012-Customs on specified telecommunication equipment [Soft switches and Voice over Internet Protocol (VoIP) equipment namely VoIP phones, media gateways, gateway controllers and session border controllers, Optical Transport equipment; combination of one / more of Packet Optical Transport Product/Switch (POTP/POTS), Optical Transport Network(OTN) products, and IP Radios, Carrier Ethernet Switch, Packet Transport Node (PTN) products, Multiprotocol Label Switching-Transport Profile (MPLS-TP) products, Multiple Input / Multiple Output (MIMO) and Long Term Evolution (LTE) Products] is being withdrawn. S.No 372 of Notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No.12/2016-Customs; dated 1st March, 2016 refers. 15) Basic Custom Duty is being withdrawn on Magnetic - Heads (all types), Ceramic / Magnetic cartridges and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Basic Custom Duty is being reduced from 2.5% to Nil on electrolysers, membranes and their parts required by caustic soda / potash unit based on membrane cell technology. S.No.417 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No. 12/2016-Customs, dated 1st March, 2016 refers. Chapter 86: 1) Basic Customs duty on refrigerated containers [8609 00 00] is being reduced from 10% to 5%. Notification No. 12/2012-Customs as amended by notification No. 12/2016-Customs, dated 1st March, 2016 [new S.No. 435A] refers. Chapter 87: 1) Basic Customs duty on golf cars [8703] is being increased from 10% to 60%. S. No. 441 of notification No.12/2012-Customs as omitted by notification No. 12/2016-Customs, dated 1st March, 2016 refers. 2) The validity period of exemption granted to specified goods for the use in the manufacture of electrically operated vehicles and hybrid vehicles is being extended without time limit. Clauses (g) and (h) of proviso to notification No. 12/2012-Customs , as omitted by notification No. 12/2016-Customs, dated 1st March, 2016 refers. 3) The description Engine for HV(Atkinson cycle) appearing in S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haul, servicing. New S.No.448A and Condition No.73A of notification No.12/2012-Customs, dated 17.03.2012 as inserted by notification No. 12/2016-Customs, dated 1st March, 2016 refers. 4) Notification No. 72/94-Customs dated 01.03.1994 provides for import of repaired or overhauled parts of aircraft under exchange / advance exchange as per Standard Exchange Scheme. This notification is being superceded by notification No. 23/2016 Customs dated 1st March, 2016 so as to provide also for import of air craft parts for repair or overhaul and for export of repaired or overhauled parts of aircraft under said scheme. Chapter 89: No change. 1) The procedure for availment of exemption from Basic Customs Duty, CVD and SAD by ship repair units is being simplified, by omitting the Condition No.79 under S.No.459A of notification No.12/2012-Customs, dated 17.03.2012. Such imports will now be subject to actual used condition. S.No.459A of notification No.12/2012-Customs, dated 17.03.2012 as amended notification No. 12/2016-Customs, dated 1st March, 2016 refers. 2) CVD is exempted under S.No.459A of notification No.12/2012-Customs, dated 17.03.2012 . This CVD exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A, of the notification No.39/96-Customs, dated 23.07.1996 are being omitted with effect from 01.04.2016. Consequently, with effect from 01.04.2016, direct imports by Government of India or State Governments [under S. Nos. 9 and 10] will attract customs duties at applicable rates. Similarly, with effect from 01.04.2016, imports [under S.Nos. 9A and 10A] will also attract BCD. Notification No. 39/96-Customs, dated 23.07.1996 as amended by notification No. 14/2016-Customs, dated the 1st March, 2016 refers. 3) S.Nos.356, 358, 359, 359A and 360 of notification No.12/2012-Customs, dated 17.03.2012 which exempt BCD and CVD on specified goods imported for petroleum exploration under various types of licenses or mining leases, pre-NELP contracts, NELP contracts, Marginal Fields Policy and the Coal Bed Methane Policy are being merged into a single new S.No.357A. Also, the list of specified goods is being unified into a single List 34 and the conditions are also being unified into a single Condition No. 40A. Further, the said exemption is being extended on imports of goods required for exploration production of hydrocarbon activities undertaken under Petroleum Exploration Licenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Bill, 2016 refers. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, these changes will come into force with immediate effect. There is no change in the Basic Excise Duty leviable under the First Schedule to the Central Excise Tariff Act, 1985 and the NCCD leviable under Seventh Schedule to the Finance Act, 2001. The changes in additional duty of excise rates on cigarettes are summarized below. Tariff Item Description (length in mm) Additional Duty of Excise (Rs. per 1000 sticks) Existing Rate New Rate 2402 20 10 Non filter not exceeding 65 70 215 2402 20 20 Non-filter exceeding 65 but not exceeding 70 110 370 2402 20 30 Filter not exceeding 65 70 215 2402 20 40 Filter exceeding 65 but not exceeding 70 70 260 2402 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed slabs and the deemed production and duty payable per month on chewing tobacco without lime tube / lime pouches and jarda scented tobacco are being aligned. Notification No. 11/2010 Central Excise (N.T.) date 27.02.2010 as amended by notification No.10/2016-Central Excise (N.T.) dated 01.03.2016 and notification No. 16/2010-Central Excise dated 27.02.2010 as amended by notification No.16/2016-Central Excise dated 01.03.2016 refer. Commodity Current rate of BED (%) Proposed rate of BED (%) Gutkha 70 81 Unmanufactured Tobacco 55 64 Chewing Tobacco (including filter khaini) 70 81 Zarda Scented Tobacco 70 81 5) The Seventh Schedule to the Finance Act, 2001 which provides for levy on NCCD of excise on specified goods is being amended so as to align the tariff lines under Chapter 24 with the First Schedule to the Central Excise Tariff Act, 1985 . Relevant Clause of Finance Bill, 2016 refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16-Clean Energy Cess dated 1st March, 2016 refers. Chapter 28, 29 or 38: 1) Basic Excise Duty on micronutrients falling under Chapter 28, 29 or 38, which are covered under Sr. No. 1(f) of Schedule 1 Part (A) of the Fertilizer Control Order, 1985 and are manufactured by the manufacturers which are registered under FCO, 1985, is being reduced from 12.5% to 6%. N otification No.12/2012- Central Excise, dated 17th March, 2012 as amended by notification No. 12/2016- Central Excise dated 1st March, 2016 [New S. No. 109A] refers. Chapter 30: No change Chapter 31: 1) Basic Excise Duty on mixture of fertilizers, made by physical mixing of chemical fertilizers on which appropriate duty of excise has been paid, by Co-operative Societies, holding certificate of manufacture for mixture of fertilizers under the Fertilizer Control Order 1985, for supply to the members of such Co-operative Societies, is being fully exempted. Notification No. 12/2012- Central Excise, dated 17th March, 2012 as amended by notification No. 12/2016- Central Excise dated 1st March, 2016 [New S. No. 128A] refers. Chapter 32 to 33: No change Chapter 34: 1) S. Nos. 39 and 40 of No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter 56 to 60: No change Chapter 61 to 63: 1) Basic Excise Duty of 2% (without CENVAT credit) or 12.5% (with CENVAT credit)‟ is being imposed on readymade garments and made up articles of textiles falling under Chapters 61, 62 and 63 (heading Nos. 6301 to 6308) of the Central Excise Tariff, except those falling under 6309 00 00 and 6310, of retail sale price (RSP) of ₹ 1000 and above when they bear or are sold under a brand name. This optional levy would apply to such readymade garments and made up articles of textiles regardless of the composition of the garment / made up article. However, in respect of readymade garments and made up articles of textiles other than those mentioned above, the optional levy of Nil (without CENVAT credit) or 6% (with CENVAT credit) in case of garments / articles of cotton, not containing any other textile material and Nil (without CENVAT credit) or 12.5% (with CENVAT credit) in case of garments / made up articles of other composition, as the case may be, shall continue. S. No. 16 of Notification No. 30/2004-CE dated the 9th July, 2004 as amended by notification No. 15/2016-Central Excise dated the 1st March, 2016 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 5/2016- Central Excise (N.T.) dated 1st March, 2016 refers. 4) Requirement of post registration physical verification for manufacturers of Articles of Jewellery [excluding articles of silver jewellery, other than studded with diamonds, ruby, emerald or sapphire] is being done away with. Notification No. 35/2001-Central Excise (N.T.), dated 26th June, 2001 is being amended suitably by notification No. 6/2016- Central Excise (N.T.) dated 1st March, 2016 refers. 5) Basic Excise duty on Gold Bars manufactured from gold ore or concentrate; gold dore bar and silver dore bar is being increased from 9% to 9.5%. S. No. 189 of Notification No.12/2012- Central Excise, dated 17th March, 2012 as amended by notification No. 12/2016- Central Excise dated 1st March, 2016 refers. 6) Basic Excise duty on Gold bars and gold coins of purity not below 99.5%, produced during the process of copper smelting is being increased from 9% to 9.5%. S. No. 191 (i) of Notification No.12/2012- Central Excise, dated 17th March, 2012 as amended by notification No. 12/2016- Central Excise dated 1st March, 2016 refers. 7) Basic Excise duty on silver manufactured from silver ore or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Notification No. 12/2016-Central Excise dated 1st March, 2016 [New S. No. 235A] refers. 2) Accessories of goods falling under tariff item 8426 41 00, heading 8427, 8429 and sub-heading 8430 10 are being included for the purposes of RSP based assessment of excise duty. S. No. 109 of Notification No.49/2008-Central Excise (N.T.), dated 24th December, 2008 as amended vide notification No. 12/2016-Central Excise (N.T.), dated 1st March, 2016 and Clause 142 (i) of the Finance Bill, 2016 refer. The Third Schedule to the Central Excise Act, 1944 is also being amended so as to include therein these accessories. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, this change will come into force with immediate effect. 3) Wrist wearable devices (commonly known as smart watches‟) [8517 62] are being notified for the purposes of RSP based assessment of excise duty with an abatement of 35%. Notification No. 49/2008-Central Excise (N.T.), dated 21.12.2008 , as amended by notification No. 12/2016-Central Excise (N.T.) dated 1st March, 2016 [new S. No. 87A] refers. The Third Schedule to the Central Excise Act, 1944 is also bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0] Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended by notification No.12/2016-Central Excise dated 1st March, 2016 [new S.Nos.262A, 263J, 263L, 263N, 263P, 263R, 263T] refer. 8) Further, excise duty is being exempted on parts, components and accessories for use in manufacture of Routers, broadband Modems, Set-top boxes for gaining access to internet, set top boxes for TV, digital video recorder (DVR) / network video recorder (NVR), CCTV camera / IP camera, lithium ion battery [other than those for mobile handsets]. Further, Excise Duty is also being exempted on sub-parts for use in manufacture of parts, components and accessories of the aforesaid Consumer Premise Equipments. These exemptions are subject to actual user condition. Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2016-Central Excise dated 1st March, 2016 [new S. Nos.262B, 263K, 263M, 263O, 263Q, 263S, 263U] refer. Chapter 86: 1) Basic Excise duty on all goods falling under 8607 (parts of railway or tramway locomotives or rolling stock) and 8608 (railway or tramway track fixtures and fitting, etc.) is being reduced to 6%. Notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are being amended to provide that CENVAT credit cannot be utilised for payment of this Infrastructure Cess. Further, no credit of this Cess would be available under the Cenvat Credit Rules, 2004 . Notification No.13/2016-Central Excise (N.T.) dated 01.03.2016 refers. 4) Accessories of certain vehicles falling under Chapter 87 are being included for RSP based assessment. S. No. 108 of Notification No.49/2008-Central Excise (N.T.), dated 24th December, 2008 as amended vide notification No.16/2016-Central Excise (N.T.), dated 1st March, 2016 refers. Third Schedule to the Central Excise Act, 1944 is also being amended so as to include therein such accessories. Clause 142(i) of the Finance Bill, 2016 refers. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, this change will come into force with immediate effect. Chapter 88: 1) Excise duty on tools and tool kits for maintenance, repair, and overhauling of aircraft is being exempted. Further, the exemption under S.No.305 of notification No.12/2012-Central Excise, dated 17.03.2012 , is being made subject to actual user condition, along with simplified procedure. Chapter 89: 1) Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... New S. No. 327A, List 9A] refers. 5) Excise duty on improved cook stoves including smokeless chulhas for burning wood, agrowaste, cowdung, briquettes, and coal in being exempted unconditionally. List-8 of Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2016-Central Excise dated 1st March, 2016 [new item 22, List-8] refers. As a result, parts of such cook stoves will also be exempt from excise duty subject to actual user condition. Consequently, notification No 62/91-CE dated 25.07.1991 is rescinded by notification No 13/2016-CE dated 01.03.2016. 6) The excise duty exemption under the existing area based exemptions for production of gold and silver from gold dore, silver dore or any other raw material is being prospectively withdrawn. Thus, a new industrial unit engaged in production of refined gold from gold dore, silver dore or any other raw material, which commences commercial production on or after 1st day of March, 2016, shall not be eligible for the said excise duty exemption. Also, an existing industrial unit as on 1st of March, 2016, which undertakes substantial expansion of existing capacity or installs fresh p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the imports under notification No.51/96-Customs, dated 23.07.1996 is ab initio exempt from SAD, there is no requirement to make a provision for refund of SAD in notification No.102/2007-Customs dated 14.09.2007. 2) Doubts have been raised as to whether any Power Project listed for exemption from BCD and CVD [under list 32A of S.No. 507 of notification No.12/2012-Customs] and awarded under International Competitive Bidding (ICB) will be eligible for excise duty exemption under S.No. 336 of notification No. 12/2012-Central Excise [which is for goods supplied against ICB procedure] even if such Power Project is separately listed in List 10 [S.No. 337] or List 11 [S.No. 338] of notification No. 12/2012-Central Excise . In this regard, it is hereby clarified that a project which is listed in List 32A of S. No. 507 of Notification No. 12/2012-Customs , [which exempts goods for such project from BCD and CVD], as a corollary, will also be exempted from excise duty under S. No. 336 of Notification No. 12/2012-CE subject to following conditions: i. if said project has been awarded based on International Competitive Bidding [ICB]; and ii. the conditions mentioned in S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under S.No. 448 and 456 of notification No.12/2012-Customs, dated 17th March, 2012 . It is, hereby, clarified that aircraft engines and parts thereof are eligible for customs duty exemption under the aforementioned S.Nos. of notification No. 12/2012-Customs dated 17.03.2012 , subject to fulfillment of conditions mentioned therein. EXCISE 1) Notification No.10/97-CE dated 01.03.1997 grants exemption from excise duty to scientific and technical instruments, apparatus, equipment (including computers) and accessories, parts and consumables, supplied to specified institutions, subject to certification by the Head of the Research Institution that the said goods are essential for research purposes and will be used for the stated purpose only, and will not be transferred or sold by the institution for a period of 5 years from the date of installation, and such institutions are registered with Department of Scientific and Industrial Research (DSIR). Representations have been received seeking clarification as to whether engineering goods such as switchboards, switchgears, electrical motors, automation products etc. are covered within the scope of the said notification. It is cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of a provision to the contrary, the area based excise duty exemption presently available to the North Eastern States including Sikkim vide notification No.20/2007-CE dated 25.04.2007 [for which the sunset clause is 31.03.2017] will be available to an existing unit on second substantial expansion as well, provided that the concerned unit commences commercial production from such expanded capacity not later than 31.03.2017. 4) Notification No.108/95-CE, dated 28th August, 1995 provides full exemption from excise duty to goods supplied to the projects financed by the UN or an international organization and approved by the Government of India subject to certification by the authorities concerned that the said goods are required for the execution of the said project. A doubt has been raised as to whether the benefit of excise duty exemption is intended to be restricted to direct supplies by the contractor to the project. In this regard, it is clarified that the exemption from excise duty, under notification No.108/95-CE dated 28.08.1995 is also available to sub-contractors for manufacture and supply of goods for or on behalf of the main contractor (who has won the contract fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Sections 28 , 47 , 51 and 156 are being amended so as to: a) increase the period of limitation from one year to two years in cases not involving fraud, suppression of facts, willful mis-statement, etc. b) provide for deferred payment of customs duties for importers and exporters to certain class of importers and exporters. 7. Section 53 is being amended so as to enable the Board to frame regulations for allowing transit of certain goods and conveyance without payment of duty. 8. Sections 57 and 58 are being substituted to provide for licensing by the Principal Commissioner or Commissioner, in place of Deputy/Assistant Commissioner, subject to such conditions as may be prescribed. 9. New section 58A is being inserted to provide for a new class of warehouses which require continued physical control and will be licensed for storing goods, as may be specified. 10. New section 58B is being inserted so as to regulate the process of cancellation of licences which is a necessary concomitan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 2 . 21. Section 72 is being amended to delete clause (c) regarding improper removal of samples 22. Section 73 is being amended to provide for cancellation bond in case of transfer of ownership of the goods, and is thus aligned with sub-section (5) of section 59 . 23. New section 73A is being inserted so as to provide for custody of warehoused goods and responsibilities including the liabilities of warehouse keepers. RETROSPECTIVE AMENDMENT S. No. Amendment 1. Various notifications pertaining to Advance Licence and Duty Free Import Authorization Schemes are being amended retrospectively, to correct the reference to section 8 in such notifications to section 8B so as to clearly provide that exemption from safeguard duty under section 8B of the Customs Tariff Act, 1975 was/is available under these notifications on imports under Advance Licence and Duty Free Import Authorization Schemes. AMENDMENT IN THE CUSTOMS TARIFF AC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Industrial solar water heater 7.5% 10% Capital goods and parts thereof 8. Increase in the tariff rate of BCD for 211 specified tariff lines in Chapters 84, 85 and 90. Out of which: 7.5% 10% a) On 96 specified tariff lines, the effective rate is being increased from 7.5% to 10%. 7.5% 10% b) On remaining 115 tariff lines the effective rate will remain unchanged at 7.5%. 7.5% 7.5% The amendments involving increase in the duty rates will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. AMENDMENTS IN THE CENTRAL EXCISE ACT, 1944 : S.No. Amendment 1. Section 5A is being amended so as to omit the requirement of publishing and offering for sale any notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f duty From To Aerated Beverages 1. Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured 18% 21% Tobacco and Tobacco Products 2. Cigar and cheroots 12.5% or ₹ 3375 per thousand, whichever is higher 12.5% or ₹ 3755 per thousand, whichever is higher 3. Cigarillos 12.5% or ₹ 3375 per thousand, whichever is higher 12.5% or ₹ 3755 per thousand, whichever is higher 4. Cigarettes of tobacco substitutes Rs.3375 per thousand Rs.3755 per thousand 5. Cigarillos of tobacco substitutes 12.5% or ₹ 3375 per thousand, whichever is higher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g renamed as Clean Environment Cess. Also, the Tenth Schedule to the Finance Act, 2010 dealing with Clean Energy Cess is being amended so as to increase the Scheduled rate of Clean Energy Cess from ₹ 300 per tonne to ₹ 400 per tonne. The effective rate of Clean Energy Cess is being increased from ₹ 200 per tonne to ₹ 400 per tonne [Clause 232] 4) Infrastructure Cess is being levied on motor vehicles, of heading 8703, as under: b) Petrol/LPG/CNG driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1200cc 1% c) Diesel driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1500cc 2.5% d) Other higher engine capacity motor vehicles and SUVs and bigger sedans 4%. Three wheeled vehicles, Electrically operated vehicles, Hybrid vehicles, Hydrogen vehicles based on fuel cell technology, Motor vehicles which after clearance have been registered for use solely as taxi, Cars for physically handicapped persons and Motor vehicles cleared as ambulances or registered for use solely as ambulance will be exempt from this Cess. No credit of this Cess will be available, and credit of no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... original date of payment of duty. 2) The CENVAT Credit Rules, 2004 are being amended, so as to improve credit flow, reduce the compliance burden and associated litigations, particularly those relating to apportionment of credit between exempted and non-exempted final products / services. Changes are also being made in the provisions relating to input service distributor, including extension of this facility to transfer input services credit to outsourced manufacturers, under certain circumstances. The amendments in these Rules will also enable manufacturers with multiple manufacturing units to maintain a common warehouse for inputs and distribute inputs with credits to the individual manufacturing units. 3) Instructions are being issued to Chief Commissioners of Central Excise to file application to Courts to withdraw prosecution in cases involving duty of less than rupees five lakh and pending for more than fifteen years. 4) The existing Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable and Other Goods) Rules, 2001 are being substituted with the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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